Sri Lanka rupee opens weaker

Feb 13, 2012 (LBO) – Sri Lanka rupee opened weaker at around 115.30/40 and traded lower against the US dollar in the spot market in the second trading day after the Central Bank withdrew from interventions, dealers said. On Thursday the rupee closed around 115.20/30 against the dollars.

On Monday the rupee opened around 115.20/30 after being quoted wide at 115.20/50 but was later traded around 115.90/97 dealers said.

The Central Bank withdrew from defending a specific price in the market but would continue to supply a part of the dollars needed to meet oil imports.

Sri Lanka hiked oil prices on Saturday, which analysts say would reduce pressure on the currency going forward. Borrowing by state energy firms to cover losses was part of the reason for Sri Lanka’s rupee peg to come under pressure.

In money markets overnight gilt-backed repos traded around 8.75/85 percent and call money was around 9.75/85 percent, about 10 to 15 basis points tighter than last week, dealers said.

A bond auction is due to be held later in the day. Dealers said there were offers of 2-year bonds around 10.80 percent, 3-years at 11.00 percent and one year bonds at 10.40 percent in an inactive market early in the day.

A bond maturing in 15.07.15 quoted 11.25/11.50 up from 11.00/11.10 levels Thursday, dealers said.